The Coalition intends to abandon $1.5 billion of union-linked wage increases for up to 350,000 workers in aged and child care, challenging one of the union movement’s strongholds.

A spokesman for Prime Minister-elect
Tony Abbott
confirmed the funding for higher wages committed by the Gillard Labor government would be redirected because the money was to be funnelled through agreements negotiated by unions, including the scandal-hit Health Services Union.

The wage rises were rushed through in the dying days of the last Parliament, and required most workers to sign up to enterprise bargaining agreements for their employers to be eligible for the extra money.

The new government does not need the agreement of the Labor and Greens-controlled Senate to stop the wage increases for aged care.

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AFR

“As part of the Coalition’s approach, we will work with providers to ensure these funds are distributed in a way that is better targeted to genuinely improving pay and conditions for the workforce," the spokesman said.

“Labor’s Workforce Compact adds to red tape without guaranteeing improved conditions for all workers. It appears to be more about boosting union membership than improving aged care."

The federal bureaucracy has also suspended payments from the $300 million Early Years Quality Fund established by the Gillard government to cover wage increases for childcare workers. The Coalition doesn’t plan to go ahead with the wage subsidies.

The Coalition government will be able to reallocate Labor’s $1.2 billion Aged Care Workforce Supplement with the approval of the House of Representatives within 15 days of the first sitting day of the new Parliament.

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Due to receive minimum annual wage increase

Under the Aged Care Workforce Compact introduced as part of the Labor government’s Living Longer Living Better policy, many aged-care workers were scheduled to receive minimum annual wage increases of 2.75 per cent, backdated to July.

The Coalition vowed during the election campaign to take the $1.2 billion allocated to the “Workforce Compact" over four years but to keep it in the general aged-care budget.

The office of outgoing Labor minister for mental health and ageing, Jacinta Collins, said 248 aged-care ­providers had applied for the subsidy by August 20.

“It looks like the [Coalition’s] first act in the job will be to put the knife to the pay of Australia’s 350,000 strong aged-care workforce," a spokeswoman for Senator Collins said.

“The tragic reality is that the ­Coalition will rip these pay increases out of the pockets of hard-working nurses and aged-care workers at a time when we need to help the aged-care workforce almost triple in size by 2050 to meet the demands of the ageing population."

The Coalition may reallocate the childcare fund, which was set up to distribute any taxpayer-subsidised pay rises for childcare workers.

It is unclear whether any childcare workers had received the wage top-up already because the Labor government was late to release the eligibility rules for the two-year wages subsidy, which was due to end in 2015.

The Coalition’s childcare policy states it would honour any contracts already made and the remaining funds would be kept in the government’s childcare budget.

The Aged Care Workforce Supplement was passed by the Labor government as a regulation rather than full legislation after the last sitting day of the last Parliament.

Regulations are not passed directly by both Houses of Parliament and can be repealed through a disallowance motion in the House or Senate.

The office of the Coalition’s spokeswoman for mental health and ageing, Concetta Fierravanti-Wells, declined to comment on Thursday.

Senator Fierravanti-Wells is expected to lose her portfolio when the new government is formed and West Australian senator Michaelia Cash is in line for the job.

Providers welcome a swift repeal

Many aged-care providers opposed the Workforce Compact and welcomed the possibility of its swift repeal.

“Using a government contract to force an industrial outcome was not in the best interests of those who would miss out on pay rises where their workforce did not have an enterprise bargaining agreement in place," Catholic Health Australia chief executive Martin Laverty said.

“That gives us confidence the incoming government not only sees the problem but is willing to consult with providers as to how best dismantle this poorly thought-through scheme.

“We not only welcome it, it shouldn’t have been committed to in the first place."

Unions, including the Australian Nursing and Midwifery Foundation (ANMF), are disappointed the planned wage increases are likely to be cancelled.

“Those providers who are now trying to walk away from the previously agreed Workforce Compact are mean-spirited and self-serving," ANMF federal secretary Lee Thomas said.

“If we cannot recruit and retain nursing and care staff, it’s older Australians primarily living in nursing homes who will ultimately suffer through poorer care outcomes."

Senator Fierravanti-Wells claimed, during fiery debates over the legislation, that the Workforce Compact was “a backdoor deal to resuscitate the HSU" after it had become embroiled in a corruption scandal.

Former HSU national secretary and ex-MP
Craig Thomson
and former national president Michael Williamson have been charged with misusing union funds for personal expenses. Mr Thomson has been accused of paying for prostitutes using union money.

Mark Mcleay, a senior national industrial officer for the HSU, said the arguments made by Senator Fierravanti-Wells were “nonsense".

“EBAs are about agreements. They’re not compulsory, there is no compulsion for employers. The supplement tied to EBAs means that workers are getting better wages and conditions and [would have] ensured that the funding flows to the workforce as it should," he said.